Are hosting providers to play a greater role in copyright
enforcement?
The role of hosts under EU law
Master’s thesis 2016
Under supervision of: mr. dr. A. Tsoutsanis
Faculty of Law
Table of contents:
1. Introduction 4
2. Qualifying hosts under EU law 6
2.1 The Enforcement Directive: Injunctions against intermediaries 6
2.2 E-Commerce Directive 2000/31/EC 7
2.2.1 Article 14 E-Commerce Directive 9
(a) Information Society Service (b) Storage of information 2.2.2 Notice and Takedown 10
2.3 No general obligation to monitor 11
2.4 Conventional hosts: Web hosting providers 12
2.5 Modern hosting providers 13
2.5.1 Dedicated server providers 13
2.5.2 Active v. passive 14
3. Legal practice 15
3.1 Interpretation by national courts 15
3.2 Evaluation of national practices 18
3.3 The Sabam cases 19
4. Balancing proportionality and effectiveness in current practices 22
4.1 Defining a proportional remedy 23
4.2 Notice and Takedown: A proportional remedy? 24
4.3 The German approach 27
4.4 Extensive duties of care 28
4.5 Notice, takedown and prevent? 29
5. Copyright protection and fundamental rights 32
5.1 Right to information 32
5.2 Right to privacy 33
6. Is EU law on intermediary obligations outdated? 37
6.1 Reviewing EU enforcement provisions 37 6.2 Learning from the United States 39 6.3 Differentiating types of hosting providers 40
7. Conclusion 41
Bibliography 43
This thesis considers whether hosting providers should be given a greater role when it comes to the enforcement of copyright online and whether EU law on this matter is out of date. The research will focus on the examination of different types of hosts with regard to the balance of interests, proportionality and fundamental rights that come to play when including the latter in copyright enforcement practices. This will be assessed using different approaches by EU member states, contradictory case law due to different interpretations of EU law and diverging opinions of notable authors.
1. Introduction
In today’s world one can hardly imagine life without the internet, as it is an important source of information. The accessibility of information is a necessary factor in human society and its development, as it inspires and contributes to the creation of new works and the distribution of knowledge. However, at the same time information is often also property, which means that its creator must be assured adequate protection of his work.
Although intangible copyright works are protected by various copyright acts and EU directives such as the Intellectual Property Rights Enforcement Directive 2004/48/EC (hereafter: IPRED) and the Copyright Directive 2001/29/EC (hereafter: Copyright Directive), its actual enforcement yet is confronted with various issues in practice.1 Both private and commercial internet users infringing copyrights benefit from the fact that they are fairly – if not completely – anonymous to copyright holders as personal information about the users are primarily only available to the Internet Service Provider (hereafter: ISP) of the service the user has subscribed to.2 In practice this means that enforcement is only possible if this information is provided by the ISP.3
However, as the latter are businesses with exclusively commercial interests, questions arise whether they should be obligated to protect copyright holders while seemingly having no genuine advantage in doing so. As current EU legislation doesn’t provide in a prominent role
1 Hugenholtz 2010, p. 303-304 2 Kao 2004, p. 405-426
for ISP’s, the essential question therefore is whether EU law on this matter is due to be revised to make copyright enforcement online more effective and guarantee protection as laid down in article 17 (2) of the Charter of Fundamental Rights of the European Union (CFREU).
As the issue involving the common triangle between the copyright holder, the access provider and the consumer has already been extensively written on, I want to focus on ISP’s in the form of hosting providers. This thesis will therefore research whether hosts have a greater role to play in order to enforce copyright law but also to prevent infringements. My research question is thus: Should EU law concerning the role of hosts be revised in order to make enforcement against online copyright infringement more effective?
In the following chapter I will discuss how hosts are qualified under current EU law. After setting out the definition and obligations of intermediaries according to the IPRED and E-Commerce Directive 2000/31/EC (hereafter: ECD), the different types of hosts will be analysed. This will provide the opportunity to verify the feasibility of their position granted by the directives in Chapter 3 while relating to current issues of enforceability occurring in practice. In the light of the issues discussed, Chapter 4 will critically analyse a variety of proposed EU-wide and national measures of copyright enforcement. These will be examined with regard to their conformity with the proportionality principle and provisions of the IPRED which will lead to a further analysis – in Chapter 5 – of the fundamental rights that are at stake. The last Chapter will be dedicated to the question whether current EU law is outdated when it comes to intermediary obligations, in which a critical examination will take place with approaches to changes legislators could invoke to improve the present system.
Fig. 1 2.1 The Enforcement Directive: Injunctions against intermediaries
As derived from Recital 2 and 3 IPRED, the Directive aims to protect intellectual property in order to allow the creator to profit from his work, for which effective measures to enforce these rights are necessary.4 When analysing the IPRED legislation two different types of addressees can be derived against whom injunctions can be sought: the initial infringer and the intermediary.5 While classic copyright enforcement provides the ability to seek injunctions against the initial perpetrator, articles 11 IPRED and 8 (3) Copyright Directive intend to target the intermediary instead.6 As an injunction is a request to a court by a rightholder to order an infringer to refrain from carrying out an act that invades the former’s rights, the provision’s aim to address the intermediary is remarkable. According to Husovec it creates hope for rightholders that the involvement of intermediaries will provide better enforcement7, as intermediaries figuratively control the pipelines that lead from the source to the well.
However, to understand what this means for copyright enforcement in practice it is necessary to define which online businesses can be defined as intermediaries and thus, against whom rightholders can seek injunctions. In order to answer this question one must look at the CJEU’s ruling in the UPC Telekabel Wien GmbH v. Constantin Film Verleih GmbH case, in which copyright holders sought an injunction against the access provider UPC after it had declined to take measures to prevent the infringement of specific copyrighted films.8 In
4 Article 3 Enforcement Directive
5 See Fig. 1, recitals 23-24 Enforcement Directive 6 Husovec, 2016, p. 6
7 Ibid
8 UPC Telekabel Wien GmbH v Constantin Film Verleih GmbH & Wega Filmproduktionsgesellschaft mbH, Case C-314/12, March 2014, para. 11-17
reaction to UPC’s argument that it cannot be considered to be an intermediary whose services are used to infringe copyright, the CJEU defined an intermediary to be any person who
carries a third party’s infringement of a protected work.9 Furthermore the Court emphasises the fact that to be considered an intermediary, a specific relationship between the infringer and the intermediary is not required.10 This judgment certainly opens a door to intermediary obligations as the Court repeatedly stresses the fact that a narrower definition of intermediaries would impair a high level of copyright protection that must be guaranteed.11 While intermediaries are, in many cases, best placed to bring such infringing activities to an
end,12 this thesis will analyse the level of involvement by intermediaries in effective copyright enforcement in the light of inter alia proportionality, effectiveness and fundamental rights.
2.2 E-Commerce Directive 2000/31/EC
While public awareness for the controversy of internet piracy increased, legislation to set rules on the function to be given to internet providers was necessary. This was provided in articles 12-14 ECD for respectively mere conduits, caching services and hosting providers. Article 14 (1) of the Directive determines the function of hosting providers and is therefore of particular interest in the scope of this thesis:
1. Where an information society service is provided that consists of the storage of information provided by a recipient of the service, Member States shall ensure that the service provider is not liable for the information stored at the request of a recipient of the service, on condition that:
(a) the provider does not have actual knowledge of illegal activity or information and, as regards claims for damages, is not aware of facts or circumstances from which the illegal activity or information is apparent; or
(b) the provider, upon obtaining such knowledge or awareness, acts expeditiously to remove or to disable access to the information.
9 Ibid, para. 30 10 Ibid, para. 34-35
11 Ibid, para. 34, Recital 9 Copyright Directive 12 Ibid, para. 27, Recital 59 Copyright Directive
While specific types of hosting providers will be analysed further on in this chapter, a general definition of a host is a service that provides their customers with the storage of information that may be made available to the public through an open platform.13 The host therefore often provides a service consisting of particular software for publication and editing, the platform space on the host’s servers and ultimately the infrastructure, embodied in the network capacity. Hosts exist in various forms such as web hosting providers, dedicated server providers and streaming services.
The Court of Justice of the European Union (CJEU) described the service provided by an ISP as one that is “merely technical, automatic and passive pointing to a lack of knowledge or control of the data which it stores”, which makes it one that provides neutral facilities for their clients’ contents.14 The ECD aims to establish an environment in which legal certainty is created for businesses while promoting the cross-border operation of online services in favour of the long standing EU internal market objective.15 Two important elements of the Directive that grant hosts their neutrality and ability to freely conduct their business are the Notice and
Takedown16 and No general obligation to monitor17 provisions, which are to be discussed
below in relevance of this thesis’ research question.
2.2.1 Article 14 E-Commerce Directive (a) Information Society Service
13 Article 14 E-Commerce Directive
14 Google France and others v. Louis Vuitton, CJEU 23 March 2010, Joined Cases C-236/08 to C-238/08, ECR I02417, para. 42, 114
15 Recital 40 E-Commerce Directive; C.K. Nielsen et. al., Study On The Economic Impact Of The Electronic Commerce Directive, European Commission 2007, p. 4
16 Article 14(b) E-Commerce Directive 17 Article 15 E-Commerce Directive
In order to define a host under article 14 ECD, its criteria must be discussed. To begin with, an information society service must be defined, which the preamble of the Directive refers to as: “any service normally provided for remuneration, at a distance, by means of electronic equipment for the processing (including digital compression) and storage of data, and at the individual request of a recipient of the service”.18 However, it has to be noted, that the word
remuneration must be interpreted in a broad sense, as an economic activity is the essential
part.19 This means that while the service might seem free to the user, revenue is made by e.g. selling advertisements. Furthermore, sender and recipient must be using data processing equipment (e.g. computer, mobile phone) at distance, presuming the latter has requested the service individually.20 This entails that the service must be on-demand, while radio and television broadcasting fall outside this scope. Nevertheless online versions of these services, providing individual access to certain programs can be considered an information society service.21
(b) Storage of information
While technology evolves at a tremendous pace, it is important to note that the ECD is already over 1.5 decades old. Legislators therefore tried to make the terms broad enough so that they are just as well applicable in the future as they were at the time the legislation was passed. The precise meaning of article 14 ECD can therefore to a large extent only be derived from the ruling of the CJEU. In its landmark case on intermediary liability, Google France, the CJEU defined storage merely as keeping information “in memory on its server”.22 Furthermore, the information must be provided by the user of the service alone and is not verified by the host before it is uploaded, as part of its passive nature.23
2.2.2 Notice and Takedown
18 Recital 17 E-Commerce Directive 19 Recital 18 E-Commerce Directive
20 Article 1 (2) of Directive 98/34/EC amending Directive 98/48/EC 21 Mindel & Sicker 2006, p.136-148
22 Google France and others v. Louis Vuitton, CJEU 23 March 2010, Joined Cases C-236/08 to C-238/08, ECR I02417, para. 111
In order to balance copyright protection and the free-flow of information, the Notice and Takedown (NTD) provision was created, enabling copyright holders to request removal of infringing content by the hosting provider.24 This provision is also referred to as safe
harbour, as it excludes hosting providers from liability when hosting infringing content
placed by customers, if the former haven’t been aware of doing so. Therefore knowledge is required for liability, however – according to the CJEU in the L’Oreal v. eBay case – a notification alone doesn’t necessarily signify knowledge, as it is necessary that the host “was
actually aware of facts or circumstances on the basis of which a diligent economic operator should have identified the illegality”.25
Nevertheless, the host can therefore still argue that removal of the item in question is not at place due to insufficient information provided by the requester.26 This creates burden for copyright holders as after having found the infringing item, effort must be made to prove the illegality.27 On the other hand the Notice and Takedown system could also have a chilling effect on intermediaries resulting in the removal of items – that might fall under an exception as listed in article 5 Copyright Directive – in order to avoid possible liability.28
An undeniable shortcoming of the system is that the Directive itself doesn’t clarify its application. While the article 16 and Recital 40 urge for specified rules of application and procedures of removal to be introduced by Member States, a vast majority of the latter have failed to do so.29
2.3 No general obligation to monitor
24 Vasudeva 2011, p. 194
25 L’Oreal SA et al v eBay International AG et al, CJEU 12 July 2011, C-324/09, para. 122 26 Edwards 2009 p. 87
27 Commission Staff Working Document: Online services, including e-commerce, in the Single Market, COM (2011) 942 Final, p. 33-34
28 Urban and Quilter 2006; Edwards 2009, p. 116 29 Spindler 2007, p. 5
The issue of knowledge of infringing material ultimately results in a copyright protection that lacks efficiency, as it is more advantageous for hosting providers to put most effort in their ignorance of the content they are hosting.30 The ECD has therefore given them the easiest and most economical way to avoid liability by simply being inactive and making sure they have no possible relation to the content hosted such as editorial functions.
Knowledge of infringing content prior to notification can therefore only proven with difficulty, unless a fairly obvious infringement is the case with a collection of freely available films in full length.31 Article 15 (1) ECD additionally motivates this conduct by stating that Member States cannot impose a general obligation for ISP’s to monitor the information
which they transmit or store, nor a general obligation actively to seek facts or circumstances indicating illegal activity.
Comparing the ECD provisions to the IPRED legislation as analysed above, a contradiction can be found as the latter accentuates the necessity of intermediary involvement to guarantee
high level protection seems to minimise the involvement. As article 3 IPRED states that necessary measures against copyright infringement online must be taken by member states in
order to protect rightholders. However, these measures must be fair and equitable and shall not be costly, cannot entail unreasonable time-limits or unwarranted delays nor be
unnecessarily complicated. Furthermore measures must be effective, proportionate and dissuasive.32
This shows somewhat of a conflict of duties to be carried out by Member States, requiring them to limit the involvement of intermediaries while simultaneously making sure that intellectual property rights are sufficiently protected and infringements prevented. Since intermediaries – as can be derived from their name – stand between the rightholder whose material has been infringed and the customer who has caused the infringement, involvement of the ISP is inevitable to some extent. The following chapters will provide an answer to this assumption. Keeping this in mind, an examination of different types of hosts will follow with the aim to analyse how the Directives are implemented in practice and whether the results comply with the legislators intentions.
2.4 Conventional hosts: Web hosting providers
30 Turner, Traynort & Smith, 2003 31 Verbiest 2007, p. 37 ff.
A web hosting provider is probably the most common type associated with hosting providers in the time the Directive was introduced.33 It defines itself by providing its customer with a service that consists of the accessibility of a website on the provider’s server. As these hosting providers are often considered to be passive and neutral hosts, they are expected to have limited liability concerning the content on their servers.34 However, a Dutch case between anti-piracy organisation BREIN and web hosting service XS Networks has shown under what circumstances web hosts can be held liable. In this case, XS Networks hosted the illegal torrent website Sumotorrent.35 The Dutch court ruled that XS Networks was supposed to remove the website directly upon notification as it was evidently infringing copyrights.36 Although this is not a ruling by a higher court, the outcome addressed an important point as it is not desirable for the ECD to protect providers that evidently host infringing contents. It results in the collapse of cooperation between anti-piracy organisations and intermediaries as the latter profits from the safe harbour exemption by closing their eyes until notified.
The intention of the Directive was not to unnecessarily involve intermediaries in the enforcement of copyright protection as they are business entities with such interests.37 However, its reservation in the involvement has commuted into hosting providers such as XS Networks creating a business model to facilitate infringement without actually getting involved with the unlawful matter. Facilitation of copyright infringement has therefore advanced to a new level, namely by neglecting to verify their customer’s identity when providing a hosting service. This subsequently makes it rather difficult to sue the infringer in front of a court of law. The question therefore is whether effective copyright enforcement isn’t burdened by the intermediary as the disclosing information is part of the prevention. The issues concerning the disclosure of information will be further discussed in Chapter 5. While the ECD might fulfil its aim ensuring hosting providers to conduct their businesses without having to worry about liability claims, the above has shown that the Directive lacks to provide legislation that prevents misuse of the safe harbour clause.
2.5 Modern hosts
33 Farano 2012, 69f 34 Idem, p. 5
35 Brein v. XS Networks, District Court of The Hague, 24 October 2012, case no. 412217/ HA ZA 12-153 36 Idem, para. 4.8
2.5.1 Dedicated server providers
In contrary to the above mentioned web hosting providers, dedicated server providers don’t merely provide their user with the “traditional” shared space on their server, but rather offer a whole server exclusively for the client’s purpose.38 This was also the case in the Ecatel v.
Premier League case, ruled by the District Court of The Hague.39 In this case, Ecatel leased their servers to clients who used them as proxy servers.40 The latter were in turn connected to illegal streaming websites with the result that users could watch the football game by using Ecatel’s server as a proxy server.41 According to the Court, the infringement doesn’t take place on Ecatel’s servers, as the actual illegal streams are on other servers while Ecatel’s is only used as a proxy.42 Therefore the Court ruled Ecatel couldn’t be defined as a host according to article 14 ECD and immediate cessation requested by Premier League was subsequently denied.43
In my opinion, this decision is a clear example of how the wordings of article 14 ECD lead to exemptions that couldn’t have been intended by the legislator. The reason Ecatel couldn’t be held responsible is due to the fact that the information wasn’t actually stored on the servers of the provider. Although Ecatel doesn’t store the streams itself, it without doubt stores information that makes it possible for users to use the stream and get access to the illegally distributed football game. Therefore, the proxy server is a clear way to circumvent liability as actions of the provider don’t fall under the definition given by the Directive. The result however is the same, as access to the illegal streams wouldn’t exist without the service provided by Ecatel. As this is exactly what the Directive aims to prevent with the NTD procedure, the judge should have interpreted the article looking at the result of Ecatel’s actions and the result the Directive aims to prevent.
Nevertheless, as a consequence neither the provider nor the untraceable customers are held responsible as the wordings of the Directive give way to loopholes for copyright infringement and undermines the obligation to protect intellectual property, laid down in article 3 Enforcement Directive and article 17 (2) CFREU.
2.5.2 Active v. Passive
38 Held 2010, p. 270-271
39 Ecatel v. Premier League, District Court of The Hague, 28 April 2015, case no. C/09/483700/KG ZA 15-267 40 Idem, para. 4.5
41 Idem
42 Idem, para. 4.7
The last important distinction that has to be made concerning the definition of a hosting provider is the one between active and passive “hosting” activities.44 Passive hosts are the more traditional type assessed above in which in which a company conducts its business by merely storing information for its customers. However, since the introduction of the ECD new types of online businesses have emerged, such as Google, eBay and YouTube who store third party content in order to create an interactive service. The question is therefore whether these services can be considered a host under article 14 ECD as they are –to a certain extent – publicly hosting their users’ content instead of providing visitors of their website with largely self-produced content. 45
The L’Oreal v. eBay case clarifies that these post-ECD services providing user generated content (UGC), are only to be considered hosts in accordance with Recital 42 of the ECD.46 The recital presumes a host to provide a service of mere technical, automatic and passive
nature with neither knowledge of, nor control over the information they store.47 The CJEU however accentuates that this doesn’t mean these services are completely excluded from the hosting exemption, as this is only the case for their active roles in the service, such as providing assistance to promote or categorise the content.48 Therefore, to be considered a hosting provider and thus profit from the safe harbour provision, the service must be neutral in its activities.49 This in turn creates somewhat legal uncertainty concerning the scope of the hosting definition as it remains unclear where the line is drawn concerning the level of activity. The uncertainty is added to by contradicting national case law when interpreting the liability issue of these services in the scope of the Directive, as will be analysed in Chapter 4.
3 Legal practice
44 Eecke & Truyens 2011, p. 132 45 Idem
46 L’Oreal SA et al v. eBay International AG et al, CJEU, C-324/09, 12 July 2011, para. 119 47 Recital 42 Directive 2000/31/EC
48 L’Oreal SA et al v. eBay International AG et al, CJEU, C-324/09, 12 July 2011, para 111-117
49 Idem, para. 113-116, Google France and others v. Louis Vuitton, CJEU 23 March 2010, Joined Cases C--236/08 to C-238/08, ECR I02417, para. 114, 116, 120
3.1 Interpretation by national courts
Although the above has shown that article 14 ECD can be interpreted broadly to protect different types of hosts, the aftermath of the L’Oreal v. eBay case has triggered various national courts within the EU to interpret ways to measure the level of activity allowed for services in order to be defined as passive and therefore be eligible to profit from the safe harbour provision.50 This has – amongst others51 – been specified in the Tiscali v. Dargaud
Lombard case52, delivered by the French Court of Cassation. In this case the web hosting provider Tiscali offered a service with which users could create their own website on the Tiscali servers. The matter was brought to court due to copyright infringements of comic cartoons that were reproduced on one of the personal websites. After a lower French court had defined Tiscali as a host in this matter, this decision was overturned as the Supreme Court found the operator to provide a more than mere technical service.53 Although Tiscali claimed that it had no control over the content being placed and should be regarded as a hosting provider the Court stated that the fact that advertisement space was being sold by Tiscali on the personal websites, confirms that it had a more active function than expected of a mere web host and is therefore liable.
I find this case particularly interesting as it states that selling advertisement space makes a provider go beyond its mere technical function designated by the ECD. However, it is of essential importance to accentuate that the reason why Tiscali had offered advertisement space is to be able to provide a free service of personal website creation. This is essential to underline when bridging the ruling to the issue of file sharing and video streaming.
A predominant example is the video streaming website myp2p.eu which displays the following statement on its website:
50 See i.a. Rapidshare, Bundesgerichtshof (Federal Court of Germany), I ZR 80/12, 15 August 2013, Telecinco
v. Youtube, Madrid Civil Court of Appeal, 505/2012, 14 January 2014, Brein v. XS Networks BV, District Court
of The Hague, 412217 / HA ZA 12-153, 24 October 2012 51 Idem
52 Telecom Italia (ex Tiscali Media) v. Stés Dargaud Lombard et Lucky Comics, Court of Cassation (France), lurisData n° 2010—051043, 14 January 2010
53 A. Blocman, Hébergeur/éditeur : la Cour de cassation se prononce enfin, IRIS Merlin, February 2012, (http://merlin.obs.coe.int/iris/2010/2/article16.fr.html [visited on: 13/06/2016])
“Myp2p is an Internet Service Provider offering a platform which merely displays links to audiovisual content located on servers of third parties and provided and/or transmitted by third parties. Myp2p does not host nor transmit any audiovisual content itself and does not control nor influence such content. Myp2p cannot accept any liability for the content transmitted by others. Any responsibility for this content lies with those who host or transmit it.”54
Although Myp2p claims to merely offer a platform displaying links to sports streams, it is rather questionable whether its practices fall under the liability protection of a hosting provider as meant under article 14 ECD as its legal intentions are dubious. At this point it is necessary to look at the C More/Myp2p case by the Court of Appeal of ‘s-Hertogenbosch in which broadcasting organisation C More sued Myp2p for infringing copyrights by making the streams available on its website.55 Unfortunately the Court did not discuss the qualification of Myp2p’s general statement that it should be considered to be an intermediary, as displayed on the website. Nevertheless, Myp2p stipulated the issue by claiming that as it just provides the hyperlinks to the actual streams, its network doesn’t function as a centralised model.56 As this
wasn’t disputed by C More, the Court accepted this qualification as a given.57 While Myp2p was considered to have committed a tort by structurally and systematically linking to the streams, the Court did not believe that it made the content available to the public as meant in article 3 (1) Copyright Directive since it was merely linking to the servers with the infringing content.58
Although this conclusion of the Court is in line with earlier rulings,59 it provides a rather unsatisfying outcome. Myp2p was ordered to delete the hyperlinks to the streams and cease any further linking to content that infringes C More’s copyrights.60 The issue at hand shows that Myp2p is structurally facilitating copyright infringement but succeeds to avoid its liability by claiming that the content is not stored on its servers – the aforementioned hosting
54 See Myp2p website (http://www.myp2p.ws/noticetakedown.html [visited on 13/06/2016])
55 C More/Myp2p, Court of Appeal of ‘s-Hertogenbosch, LJN BM9205, case no. HD200029368, 12 January 2010
56 C More/Myp2p, Court of Appeal of ‘s-Hertogenbosch, LJN BM9205, case no. HD200029368, 12 January 2010, para. 4.92
57 Idem
58 Idem, para 4.103
59 In the following judgments linking to infringing information was considered a tort: Deutsche Bahn v.
Indymedia, District Court of Amsterdam, 20 June 2002, LJN AE4427; Deutsche Bahn v. XS4ALL, District Court
of Amsterdam, 15 April 2002, LJN AE1935, para. 9; Brein v. Techno Design, Amsterdam Court of Appeal, 15 June 2006, LJN AX7579; Brein v. Mininova, District Court of Utrecht, 26 August 2009, LJN BJ6008
60 C More/Myp2p, Court of Appeal of ‘s-Hertogenbosch, LJN BM9205, case no. HD200029368, 12 January 2010, para. 5
defence. Nevertheless it is obvious that Myp2p plays an essential role in the technical process of the infringement as users’ access to the content is eased by the highly categorised Myp2p website. Yet, Myp2p wasn’t obliged to pay any compensation for financial damages caused by the facilitation and the website continues its usual practice of linking to infringing content in general.
It is however, the construction of article 14 ECD’s hosting defence that contributes to the continuation of these infringements. As briefly mentioned before, the legislator had simple hosting providers in mind when construing article 14 ECD, who had no further relationship with the content they indirectly provide. For these straight forward types of hosting providers, the hosting defence works fine to protect the functioning of the internet and copyright with the NTD procedures. However, this is not the case with illegal live streams, as the idea of these services is the instant display of the ongoing event. As the event is only of importance in the few hours it takes place, the NTD procedure isn’t efficient as the infringement only occurs during the short time of the event and takedown will expectedly take place after completion. Article 14 ECD therefore clearly fails to provide the balance of interests the legislator had intended. The consequence is that another loophole is created for services with doubtful intentions. As the aforementioned case law has shown that providers are able to circumvent liability by using this loophole, the inapplicable NTD safeguard to prevent infringement is ineffective.61 Article 14 ECD might therefore need revising by differentiating between different types of hosts to meet the requirement of effective copyright enforcement, which will be further examined in Chapter 6.
3.2 Evaluation of national practices
As the above has shown that a general hosting exemption as seen in article 14 ECD, covering all kinds of hosts doesn’t work in practice, it is essential to analyse the effectiveness of article 15 ECD, prohibiting a general obligation to monitor to be imposed on intermediaries.
While this is an indispensable provision for the impartiality of hosting providers and the functionality of their business conduction, it creates a hurdle for the effectiveness of copyright enforcement online. As the proportionality question is one for the upcoming chapter, at this point I would like to address the provision’s role in the light of streaming services in practice. Continuing the example of Myp2p, it is debatable whether the prohibition to obligate monitoring is in line with the idea behind this provision concerning these types of hosts. The importance of this question lies within the fact that the nature of hosts has drastically changed since the Directive was introduced.62 As mentioned above, Myp2p is no classic intermediary, but rather provides a highly categorised service.63 Although it doesn’t host the streams itself it does host the links to the streams which it categorises to ease access. Given that the provider therefore cannot be held liable for hosting infringing content, the Court of Appeal finds it rather implausible that Myp2p sees itself unable to filter the content for infringing links.64
As the active role of Myp2p doesn’t concern categorising the infringing streams itself, but merely the way to get to them Myp2p cannot be compared to the position eBay fulfilled by actively categorising content that infringed trademarks nor Tiscali who also had the infringing content on its servers.65 However it is undeniable that Myp2p has – although to a lesser extent – an active role as it additionally remarks that it will administer the ratings given by users to the individual links.66 In my opinion this active role and especially the expertise Myp2p must have developed in this sector should make it able to differentiate between legal streams and illegal ones. As comfort for the user seems to come first, it is not unlikely that the provider tests the streams, after which Myp2p could identify possible infringements. Furthermore, the web address of the link gives an indication whether the stream is provided by a trusted legal source or an unknown disputable one. This would therefore only cost Myp2p little effort to sieve out infringing material. The role Myp2p fulfils doesn’t comply with the role article 14 and 15 ECD originally had in mind, as Myp2p does have influence on the content and filtering the links would be relatively easy, unlike for web hosting providers which the Directive intentionally aims to protect.
62 B. Van der Sloot 2015, p. 91, 96
63 See Myp2p website with regard to the categorisation of links by sports and corresponding events (http://www.myp2p.ws/ [visited on 13/06/2016])
64 C More/Myp2p, Court of Appeal of ‘s-Hertogenbosch, LJN BM9205, case no. HD200029368, 12 January 2010, para. 4.108
65 L’Oreal SA et al v. eBay International AG et al, CJEU, C-324/09, 12 July 2011, para. 111-117 66 See (http://www.myp2p.ws/useragreement.html [visited on: 13/06/2016])
It is clear that Myp2p doesn’t fit the description of a purely passive host, although the links displayed are partly provided by third parties.67 Nevertheless, the provider cannot be held directly liable for copyright infringement either because it merely displays the links to infringing streams.68 Chapter 6 will therefore devote itself to review article 14 and 15 ECD in order to find a different approach towards modern types of hosts, in which the ruling of Scarlet/Sabam – which clarified the prohibition of obligatory monitoring – might not apply.
3.3 The Sabam cases
When analysing the meaning of article 15 ECD for copyright enforcement online, the Scarlet
v. Sabam69 and Sabam v. Netlog70 cases play an integral role in the scope of the aim of this
thesis. In these cases the CJEU had to rule whether the copyright collection society Sabam could force intermediaries to install an active filtering system to fight copyright infringement. In the first case, Sabam wanted the access provider Scarlet to block its users’ access to peer-to-peer file sharing after examining the files and identifying them as unlawful.71 The following year, after the CJEU had denied Sabam’s claims, the Court had to rule over the same measures the copyright collection society demanded for the social media website Netlog.72 However, yet again the CJEU denied Sabam’s request, as – quoting the Court – “such an injunction would result in a serious infringement of the freedom of the hosting
service provider to conduct its business since it would require that hosting service provider to install a complicated, costly, permanent computer system at its own expense”73 as
prohibited by article 15 ECD and 3 Enforcement Directive.
While it has to be noted that the measures Sabam was requesting to be implemented were a long shot and highly intrusive of various fundamental rights (see Chapter 5), there is a clear distinction to be made between the two cases. The CJEU’s decision in the Netlog v. Sabam
67 C More/Myp2p, Court of Appeal of ‘s-Hertogenbosch, LJN BM9205, case no. HD200029368, 12 January 2010, para. 4.100, 4.109
68 Idem, para. 4.112
69 Scarlet Extended SA v Société belge des auters, compositeurs et éditeurs SCRL (SABAM), CJEU C-70/10, 24 November 2011
70 Belgische Vereniging van Auteurs, Componisten en Uitgevers CVBA (SABAM) v Netlog NV, CJEU C-360/10, 16 February 2012
71 Scarlet Extended SA v Société belge des auters, compositeurs et éditeurs SCRL (SABAM), CJEU C-70/10, 24 November 2011, para. 20-24
72 Belgische Vereniging van Auteurs, Componisten en Uitgevers CVBA (SABAM) v Netlog NV, CJEU C-360/10, 16 February 2012, para. 28
case is comparable to its decision in the Scarlet v. Sabam case, as the cases seem to be very similar, namely balancing fundamental rights with an ideal copyright enforcement framework without crossing the border article 15 ECD sets for an intermediary’s protection.
However, although the CJEU reaches the same conclusion, its similarity is deceptive as the distinction that has to be made is that the first case concerned a mere conduit under article 12 ECD and the second involved a hosting provider as laid down in article 14 ECD. This difference is of vast importance as the first simply creates access to a possible infringement while the second unknowingly provides it by storing the content. Furthermore, the provision in article 12 ECD is not as strict as article 14 ECD, as the latter precludes liability only in case of ignorance while this condition does not exist for access providers.74 While the specific provisions75 differentiate between the intermediaries concerning their liability according to their involvement with the content, article 15 ECD clearly lacks in doing the same.
In my opinion this is an immense shortcoming of the Directive as it ignores the technical differences between these two types of intermediaries. First of all, the amount of content that is handled is much larger concerning an access provider than a hosting provider. While a hosting provider only handles the content on its servers, access providers handle foreign content and more importantly: all content available on the web that the internet user desires to access. Therefore it is unreasonable to expect an access provider to filter an unforeseeable and unlimited amount of unknown data. However, this is not the case with hosting providers, who host content stored on their own servers. Therefore the amount of content is limited and foreseeable, which makes it easier to control and examine than it would be for an access provider to do so. Secondly, filtering content that is transmitted on a network is not the same as scanning content located on a server the intermediary owns and controls. It is therefore very spiteful that the legislation didn’t acknowledge this major technical difference between the two intermediaries when it comes to monitoring. As the Directive differentiates between the two intermediaries in terms of liability, it should have also done so when it comes to monitoring. The lack of differentiation is also seen in the CJEU’s judgement as it came to the same conclusion in both Sabam cases. At this point I do want to stress the fact that I certainly don’t think that the far-reaching system proposed by Sabam is a fair balance between intermediaries’ objectives and copyright enforcement. However, I do think that there is more
74 Article 12 and 14 Directive 2000/31/EC 75 Article 12-14 Directive 2000/31/EC
room for filtering by hosting providers than by access providers, just as there is more room for liability for one than for the other.
4. Balancing proportionality and effectiveness in current practices
After having discussed the cases in which different types of hosting providers can be held liable and the balance the ECD tries to uphold between intermediaries’ interests76 and
copyright enforcement, it is now necessary to discuss whether the provisions in question comply with the principle of proportionality.
Article 3 (2) IPRED requires Member States to take measures, procedures and remedies to prevent copyright infringement that are effective, proportionate and dissuasive and shall be
applied in such a manner as to avoid the creation of barriers to legitimate trade and to provide for safeguards against their abuse. In addition, article 8(3) of the Copyright
Directive requires Member States to ensure that rightholders are in a position to apply for an
injunction against intermediaries whose services are used by a third party to infringe a copyright or related right.
Nevertheless we have seen in the outcome of the Sabam cases above, that the copyright holder’s position to apply for an injunction as well as the measures to be taken to prevent copyright infringement are limited to the rules of proportionality.77 The question of this section will therefore be what a proportional remedy entails. The aim is to analyse the proportionality for both parties, on one side the proportionality of the current system from an intermediaries’ perspective and on the other side the proportionality in the light of effective measures for copyright holders to prevent infringement.
4.1 Defining a proportional remedy
Article 11 IPRED requires Member States to ensure that, where a judicial decision is taken
finding an infringement of an intellectual property right, the judicial authorities may issue against the infringer an injunction aimed at prohibiting the continuation of the infringement.
Furthermore, rightholders must be in a position to apply for an injunction against
77 Belgische Vereniging van Auteurs, Componisten en Uitgevers CVBA (SABAM) v Netlog NV, CJEU C-360/10, 16 February 2012, para. 8, 34, 42
intermediaries whose services are used by a third party to infringe an intellectual property right. In its L’Oreal v. eBay case the CJEU ruled that a measure imposed on an intermediary
in form of an injunction as meant by article 11 IPRED, must be in balance with the rights and interests involved78 and cannot conflict with the principle of proportionality as a general principle of Community law.79
Next to the aim to balance interests of the parties involved, as portrayed in recital 41 ECD, the principle of proportionality has originally evolved from CJEU case law, derived from the idea that measures taken to achieve a certain goal should not exceed the extent that is necessary and appropriate to reach that goal.80 The consistence of the principle can therefore be laid out in a threefold of elements: the measure must be applicable to the legitimate aim; it has to be necessary and provide a fair balance between the parties’ interests.81
4.2 Notice and Takedown: A proportional remedy?
After having explained the theoretical, practical and technical aspects of the NTD system in Chapter 2, at this stage I would like to discuss the question whether it complies with the principle of proportionality and its criteria as set out above. Discussing its compliance with the principle is necessary in the scope of the research question of this thesis, as it will show
78 L’Oreal SA et al v. eBay International AG et al, CJEU, C-324/09, 12 July 2011, para. 143
79 Productores de Música de España (Promusicae) v. Telefónica de España SAU, CJEU Case C-275/06, 29 January 2008 para. 65-68
80 Mendis 2011, p. 70; British American Tobacco (Investments) and Imperial Tobacco, CJEU, C-491/01, 10 December 2002, para. 122; Raitio 2003, p. 96
81 Groussot 2006, p. 150ff; Laakso 1999 p. 1080-1091; Bonnier Audio, CJEU, C-461/10, 19 April 2012, para. 59
whether the current system is fair and effective and/or whether new steps should be taken by the legislator, changing the role of intermediaries in order to improve copyright enforcement online. After discussing the proportionality of the NTD system as explained above, I will focus on approaches taken in selected Member States in case law to improve the classic NTD procedures. To recapitulate, the aim of the NTD system is to create a safe harbour for hosting providers to limit their liability in case of copyright infringement by their customers. It creates the ability for copyright holders to have the infringing content removed without the intermediary being obliged to be on the lookout for infringing content themselves.
Using the criteria derived above in a proportionality test, the first question is whether the NTD measure is applicable to reach its aim. In principle it is safe to say that the NTD system has reached its proposed aim, as the case law above has shown its effect to diminish intermediaries’ fear of liability in order to conduct their business. The NTD system is without doubt a far less burdensome measure for intermediaries to ‘cooperate’ with copyright holders than having to monitor their customers’ content for infringements. Furthermore, it is a fast and easy way for intermediaries to fulfil the duty laid on Member States to include intermediaries to a certain extent in the prevention of copyright infringement where necessary as seen in articles 3 and 11 IPRED. Lastly, it is certainly a measure that reduces the expenses to a minimum. This concerns intermediaries as well as copyright holders, as the ISP doesn’t have to spend money on complicated technical measures nor valuable time on searching for infringing content. Although this time is spent by copyright holders, the NTD system is certainly less expensive than inquiring a restraining order or preliminary injunction from a court.82
The second question to be asked when examining the proportionality is the necessity of the measure. As article 3 IPRED lays the imposition on Member States to take measures in order to protect intellectual property, the basis for the necessity of the NTD system is found. The NTD system is therefore necessary, provided that it is a measure that provides protection for rightholders as required by the Directive. The final criterion is in my opinion the most essential one, as the proportionality depends on the balance of interests of the parties
involved.83 It is not only important due to its numerous mentioning in landmark cases84, but also because it implies the remaining criteria of article 3 IPRED, being: fair, equitable,
unwarranted delays, effectiveness and dissuasiveness. These criteria form the interests of
both parties, while their respective interpretation obviously diverges.
When examining whether the interests of both parties are principally balanced, the proportionality of the NTD system becomes questionable. A common criticism of the system from an intermediary perspective is that it creates a chilling effect, as only removing allegedly infringing content spares the intermediary of liability.85 Therefore critics say that also not infringing content might be removed by the intermediary out of fear of liability.86 The system lacks an essential part of a legal process, namely proving that the content is infringing. Instead of the plaintiff having to prove that the content is infringing, the duty has moved to the defendant to prove it is not.87 This occurs as the intermediary has to take up the role of the judge as well in order to evaluate the request by the copyright holder.
The chilling effect of the system due to the fact that no middleman is involved to evaluate the request to remove the content can be called dissuasive as meant by article 3 Enforcement Directive. Furthermore, it might result in taking down legal content which is a serious concern for fundamental rights, which will be elaborated on at a later stage in this thesis. Furthermore, fairness is an issue that is probably the most important one to discuss when examining the NTD system from the perspective of a copyright holder. The most evident issue that comes to mind is the fact that the NTD system does not differentiate between different types of hosting providers as explained earlier. As we have seen above, there are various types of hosting providers of which many haven’t existed in the time the ECD was introduced. It is therefore very questionable why hosting providers should be able to profit from the advantages of the NTD system and the liability exemption if their business model doesn’t comply with what the legislator had in mind.
This raises several questions concerning the dissuasiveness and fairness of the NTD system. Is it fair to exclude a hosting provider from liability if it gives its customers the opportunity to stay anonymous by being negligent with the verification of personal information and
83 Lindqvist, CJEU Case C-101/01, ECR I-12971, 6 November 2003, para. 80-85
84 L’Oreal SA et al v. eBay International AG et al, CJEU, C-324/09, 12 July 2011; Belgische Vereniging van
Auteurs, Componisten en Uitgevers CVBA (SABAM) v Netlog NV, CJEU C-360/10, 16 February 2012
85 Urban and Quilter 2006 86 Edwards 2009, p. 116 87 Vasudeva 2011, p. 200
allowing payments with untraceable payment methods? Is it dissuasive to allow a hosting provider such as Myp2p to wait for a NTD request although the hosted content is limited while being easily manageable and verifiable? The answers to the above questions are clearly negative as these situations are not what the legislator had in mind. After all, procedural rules to protect individual’s rights cannot make it unnecessarily difficult for the rightholder to employ his right to effective injunction and protection of his property.88
Moreover, the NTD system lacks effectiveness as the outcome discussed case law has shown that hosting providers merely remove the infringing content in question; however prevention of copyright infringement is not effectuated by the system.89 It is after all the nature of the internet that new content is just as quickly uploaded as it is removed. Furthermore, we have seen in the Ecatel v. Premier League case that the Directive’s narrow interpretation of a host results in the unpunished facilitation of copyright infringement. This shows the NTD system is ineffective when it comes to hosting providers that haven’t existed at the time of the introduction of the ECD, leaving copyright holders empty-handed with undesirable consequences for copyright enforcement online.
The above has shown that the system provided by article 14 ECD to protect hosting providers to a certain extent from liability whilst ensuring copyright enforcement lacks compliance with article 3 IPRED and the general principle of proportionality. While it might create a chilling effect for intermediaries, it proves to be inequitable and ineffective when it comes to modern types of hosting providers as the nature of their business models expose loopholes in the NTD system.
4.3 The German approach
After having discussed the NTD system in terms of proportionality and effectiveness, I will now analyse the approach taken by German courts to fight copyright infringement online, what role hosting providers are given in this process and how this complies with both the ECD as well as the IPRED.
88 Chalmers, Davies & Monti 2010, p. 276; DEB, CJEU C-279/09, 22 December 2010, para.28; Unibet, CJEU C-432/05, 13 March 2007, para. 43
89 C More/Myp2p, Court of Appeal of ‘s-Hertogenbosch, LJN BM9205, case no. HD200029368, 12 January 2010, para. 4.100, 4.108
As loopholes in the current legislation on hosting providers form a persistent dilemma for copyright holders, the German Federal Court of Justice (Bundesgerichtshof, hereafter: BGH) has recently taken an interesting approach to prevent continuing copyright infringement. While the current legislation solely distinguished an infringer from the hosting provider with NTD duties, the BGH has developed an additional type of liability, the Störerhaftung (interferer’s liability). According to the highest German court, a hosting provider can be held liable as an interferer if it contributes to the copyright infringement in terms of causality.90 This can however only be the case if the hosting provider seems to be closer to the copyright infringement compared to a provider who provides its services in a more general way.91 Furthermore the liability of the direct infringer has to be improbable with the consequence that the copyright holder is left empty-handed due to a loophole in the legislation.92 The follow-up step the court takes is to impose a greater role to such an interfering hosting provider, namely a reasonable duty of care.93 While the precise extent of such a duty remains unclear, the BGH underlines the reasonability of these duties while making it clear that they cannot annihilate the intermediary’s business model.94
Nevertheless, the effectiveness of measures for copyright enforcement and prevention of further infringement of the same kind seems to come first in German case law as the BGH has ruled in an earlier judgment that a hosting provider – in this case an online auction site – has to take technically possible and reasonable measures to make sure that infringing material is removed from its website.95 This implies a filtering system, a measure aiming not only to take down infringing material upon notice by the copyright holder, but also prevention of further infringements of the same work.96 Although this first mentioning of the interferer’s liability by the BGH took place in 2004, before the Sabam ruling, the Federal Court has nonetheless continued this practice, even though it hasn’t been as clear on the outlines of the duties of an interferer even since.97
90 Internetversteigerung Rolex, Federal Court of Justice (BGH), 11 March 2004 - I ZR 304/01, para. 860, 864; Federal Court of Justice (BGH), 12 July 2012, I ZR 18/11, para 3; Federal Court of Justice (BGH), August 15 2013 – I ZR 80/12 para, 550 f.
91 Nordemann 2011, p. 39-41; Wilmer 2008, p. 8-9
92 Federal Court of Justice (BGH), 26 November 2015, Az. I ZR 174/14, para. II (aa) 93 Nordemann 2011, p. 40-41
94 Wilmer 2008, p. 5-6, Court of Appeal (OLG) Hamburg, 24 August 2006, 3 U 103/06, K&R 2006, para. 586 95 Internetversteigerung Rolex, Federal Court of Justice (BGH), 11 March 2004 - I ZR 304/01, GRUR 2004, para. 860, 864, Internetversteigerung II, Federal Court of Justice (BGH), 19 April 2007, I ZR 35/04, para. 708 96 Nordemann 2011, p. 41-44
In 2015 the Court of Appeal (OLG) of Hamburg confirmed that a general obligation to monitor as meant in article 15 ECD cannot be imposed, however the imposition of lighter measures depends on the individual case. Imposing a duty on a hosting provider to use a filtering system based on certain words would not fall under article 15 ECD, according to the Court, as it is a reasonable, uncomplicated measure that doesn’t interfere with the intermediary’s business model.98 The OLG points out a clear difference in reasonability between obligating a hosting provider to use filtering software (e.g. based on word similarity) and imposing a system wherein manual filtering is required.99
4.4 Extensive duties of care
The Court of Appeal of Hamburg has clarified to what extent a hosting provider can be held liable as an interferer as meant by the BGH and consequently what duties can be imposed to guarantee protection of copyright. The case concerned the question whether YouTube could be held liable for copyright infringements of UGC on its website.100 These cases are particularly interesting due to the fact that YouTube has a straightforward NTD procedure, which lead to the assumption that its liability was not an issue.101
After having determined that YouTube is a hosting provider, the court comes to the conclusion that the video sharing website cannot be held liable as a direct infringer, as the content is uploaded to its servers by third parties. 102 Simply the negligence to prevent other infringements of the same kind after having followed the NTD procedure is insufficient to conclude that YouTube is a contributory infringer.103 Nevertheless, the Court of Appeal states that article 14 ECD is not applicable to YouTube as the website presents the content as if it were its own by arranging and structuring the content, however not to the extent as eBay’s active role which precluded it from being a hosting provider in the L’Oreal v. eBay case.104 According to the court, the essential difference is that the liability of eBay lied in the different
98 GEMA v. Youtube, Court of Appeal of Hamburg (OLG Hamburg), 1 July 2015, Az. 5 U 87/12, para. 450, 458, 494
99 Idem
100 Nordemann 2016, p. 9 101 Kim 2007, p. 172
102 GEMA v. Youtube, Court of Appeal of Hamburg (OLG Hamburg), 1 July 2015, Az. 5 U 87/12, para. 487 103 Idem, para. 276, 337
types of classified advertisements it sold to its users, while YouTube has a more general responsibility for the behaviour of its users.105
Even though YouTube cannot be held liable as a direct infringer or due to contributory infringement, it can neither be compared to that of a classic hosting provider who merely stores third party material without further knowledge of its content.106 Therefore the Court rules that YouTube has extensive duties of care with regard to copyright infringement, entailing that once notified by the copyright holder, YouTube doesn’t only need to take the infringing content down but also has to make sure that it stays down by preventing new infringement of the same work.
4.5 Notice, takedown and prevent?
The essential question, however, is whether this approach by German courts complies with the provisions of the ECD and IPRED. After the Sabam cases, imposing measures on intermediaries to monitor their users’ content was thought to be clearly off the table. Nevertheless, it must be kept in mind that the CJEU clarified that it didn’t object to all kinds of filtering methods.107 Furthermore, it is important to note that the measure proposed by collective rights management organisation Sabam is very different from the measure the Court of Appeal has imposed on YouTube.
The CJEU ruled that the filtering obligation proposed by Sabam would be a breach of article 15 (1) ECD as it required the intermediary to monitor all data of all users for any copyright infringement to occur in the future.108 This is certainly not the case with the measure proposed in GEMA v. YouTube as the hosting provider merely has to filter to prevent infringements of the same work,109 which complies with the CJEU ruling as merely further infringement are prevented.110 The permission to impose measures to prevent copyright infringement was
105 Idem, para. 486 f.
106 Nordemann 2016, p. 10-11
107 Kulk 2012, p. 4; Belgische Vereniging van Auteurs, Componisten en Uitgevers CVBA (SABAM) v Netlog
NV, CJEU C-360/10, 16 February 2012, para. 29, 51
108 Belgische Vereniging van Auteurs, Componisten en Uitgevers CVBA (SABAM) v Netlog NV, CJEU C-360/10, 16 February 2012, para. 37-38
109 GEMA v. Youtube, Court of Appeal of Hamburg (OLG Hamburg), 1 July 2015, Az. 5 U 87/12, para. 497, 531
granted by the CJEU in L’Oreal/eBay as long as they comply with the criteria of article 3 IPRED.111
In my opinion this is consequently a fair and equitable measure for all parties involved. Contrary to both the NTD system and Sabam’s proposal, this measure doesn’t require one party to carry all the costs and workload. Evidently, the copyright holder has to continue his task to search for copyright infringements without relying on the intermediary to do this for him. The time and money spent on searching for infringing material is therefore put on the rightholder’s account, while the intermediary has no monitoring task but merely has to filter content with similar wordings to the material mentioned in the notice. As a result, the costs to protect copyright infringement as required by article 3 IPRED are divided while setting up an automated filtering system based on keywords is an uncomplicated reasonably cost-efficient method to achieve the set goal.
Furthermore, this system doesn’t require active observation of files stored by users by the host, which the CJEU opposed to in Sabam v. Netlog.112 Therefore, this measure should be in compliance with the judgment in the Sabam cases and the provision of article 15 (1) ECD. Furthermore, the measure’s effectiveness is guaranteed as infringing material stays down in comparison to the NTD system that lacks efficiency as solely a specific file is taken down. The fact that similar files containing the same work can be uploaded within short time proves the NTD’s ineffectiveness, as new notices have to be sent.
A further argument proving that this measure is in line with the ECD is that – although article 15 ECD prohibits active monitoring – requiring hosting providers to prevent copyright infringement by imposing duties of care is allowed concerning Recital 48 of the Directive. As concluded above, monitoring implies an active searching and controlling duty aiming to guarantee a stop of illegal activities.113 Filtering aims to prevent future infringements however yet entails a dissuasive character and is effective if both parties carry out their share in enforcing copyright online. Although the above shows that the measure imposed on YouTube by the Hamburg Court of Appeal is an equitable alternative to the NTD system providing a balance of duties and a more effective outcome, it is now necessary to examine
111 L’Oreal SA et al v. eBay International AG et al, CJEU, C-324/09, 12 July 2011, para. 139
112 Belgische Vereniging van Auteurs, Componisten en Uitgevers CVBA (SABAM) v Netlog NV, CJEU C-360/10, 16 February 2012, para. 37-38
the proportionality of a greater role for hosting providers in copyright enforcement in terms of fundamental rights.
5.1 Right to information
When thinking about legislation on measures to protect copyright and increase effectiveness of its enforcement, the balance of interests plays an essential role. Enforcing copyright is often said to create a burden for the freedom of information.114 Therefore, balancing these interests – being, protection of copyright holders on the one side and the public interest for freedom of information on the other side – is a tricky task for the legislator. Both interests are constitutionally protected by various national legislations and multi-national treaties.115 As this thesis primarily focuses on EU legislation concerning the liability and duties of hosting providers, the Charter of Fundamental Rights of the European Union (CFREU) will be used as a reference.
While article 17 (2) CFREU states that intellectual property shall be protected, the freedom of information is guaranteed by article 11 (1) CFREU. The conflict between these two rights lies within the fact that copyright grants the owner exclusive rights of exploitation including the right to decide how and where the work is published. Therefore the copyright holder can limit its publication to certain online journals, only available to a certain public with access to subscription-based websites. As copyright can prevent access to the information, this might limit the freedom to hold opinions and to receive and impart information and ideas as guaranteed by article 11 (1) CFREU and thereby impinge on the ability to express oneself.116 However, there is a paradox involved as without copyright protection the work might have not existed in the first place as the author might not have been given the incentive to create.117 Article 52 (1) CFREU states that limitations can be applied to protect the rights and
freedoms of others while being subject to the principle of proportionality. It is therefore safe
to say that it is in the general interest for intellectual property to be protected with the necessary measures to guarantee that authors are rewarded for their work.118 Studies have proven that copyright enforcement measures against illegal file-sharing – which could restrict the freedom of information – have contributed to an increase in the consumption of legal content,119 which confirms the effectiveness and necessity of such measures. Furthermore a
114 Stalla-Bourdillon 2010, p. 494-496.
115 See i.a. articles 11 (1) CFREU, 19 (2) ICCPR, 10 (1) ECHR 116 Bonadio 2011, p. 620
117 Idem; Netanel 2008, p. 3-12
118 France 2 v. France, European Commission of Human Rights, 15 January 1997, case no. 30262/96 119 Danaher & Smith 2014, p. 1-8,
recent WIPO report has shown that fighting copyright infringement is most effective if both governments and business entities contribute to copyright enforcement.120
In addition, the CJEU decided in the Scarlet v. Netlog case that a filtering system is permissible if it has the ability to distinguish unlawful content from lawful content in order to guarantee that the latter is impaired by the enforcement measure.121 This decision is supported by the ruling of the CJEU in the Promusicae case in which the court ruled that an imposed measure must be able to strike a balance between both fundamental rights.122 At last, the UPC
Telekabel Wien case has shown that the freedom of information doesn’t preclude measures
taken in order to protect copyright holder’s as long as these measures are effective and don’t prevent internet users from accessing legal content.123
5.2 Right to privacy
The right to privacy is an indispensable right that protects people from misuse of personal information as it is a cornerstone of a democratic society. The right has received a rise in attention, particularly in the past decade as the internet has found its way to become an integral part of our lives.124 Therefore it is an essential subject of discussion when it comes to constructing measures to include hosting providers in the effective enforcement of copyright online.
As part of effective copyright enforcement is prevention and prosecution of infringers, the disclosure of personal information is an essential element for copyright holders. This information contains the necessary personal data of the infringer so that the copyright holder can take further steps to gain monetary compensation in front of a court of law.125 However, as mentioned above, the intermediary is the only one with access to this information and is likely to protect the privacy of its customers for reputational reasons. Nevertheless, article 7 (f) of the Data Protection Directive 95/46/EC provides that personal data may be processed in case processing is necessary for the purposes of the legitimate interests pursued by the
120 Danaher, Smith & Telang 2015
121 Belgische Vereniging van Auteurs, Componisten en Uitgevers CVBA (SABAM) v Netlog NV, CJEU C-360/10, 16 February 2012, para. 50
122 Productores de Música de España (Promusicae) v. Telefónica de España SAU, CJEU Case C-275/06, 29 January 2008 para. 62-68
123 UPC Telekabel Wien GmbH v Constantin Film Verleih GmbH & Wega Filmproduktionsgesellschaft mbH, Case C-314/12, March 2014, para. 64
124 Lessing 2015, p. 27 125 Lucchi 2006,p. 75
